Audit sparked by Business Insider story slams California ties to Chinese boarding school

In a significant development following a Business Insider investigation, California education officials have released a scathing audit that scrutinizes the Val Verde Unified School District's connections to a private boarding school in China. This extensive report, spanning more than 1,000 pages, has uncovered what officials describe as "sufficient evidence" of fraud, misappropriation of funds, and other potentially illegal financial practices. Riverside County Superintendent of Schools, Edwin Gomez, emphasized that the findings warrant further investigation by the appropriate authorities, including the district attorney. The audit, commissioned by the Riverside County Superintendent and conducted by a law firm, focused on the relationship between Val Verde and the Pegasus California School, located over 6,000 miles away in Qingdao, China. The report noted that Pegasus was promoted as a gateway for Chinese students to access California's public education system, with a promise of guaranteed admission to a top 100 American university or a refund. The collaboration began in 2016 when Val Verde adopted Pegasus as a "sister school," later approving a pilot program allowing the district to issue diplomas to Pegasus graduates. However, the audit revealed that these diplomas were issued improperly, as there was no evidence that students from Pegasus met the necessary course requirements or proficiency standards. According to the report, Val Verde teachers were incentivized to teach at the Chinese institution, enjoying furnished accommodations and benefits, along with the assurance of being able to return to their positions in the U.S. upon completion of their assignment. The audit also highlighted questionable practices concerning salary increases for teachers returning from unpaid leaves of absence. The investigation turned its attention to former education officials who facilitated the district's partnership with Pegasus and actively promoted it among prominent California universities. Key figures identified included Tom Torlakson, the former state superintendent of public instruction, and David Long, a previous California secretary of education, both of whom were connected to the school district. Throughout the audit, various officials were implicated in potential misconduct, including fraud, conflicts of interest, and violations of the Political Reform Act. The report indicated a troubling pattern of favors and official actions that seemingly led to the endorsement of Pegasus by state officials and the approval of the diploma program by Val Verde. In light of the audit findings, Gomez has informed the governing board of Val Verde, the state controller, and the state superintendent of public instruction. The California Department of Education has also acknowledged the report and pledged to support any ensuing investigations regarding the misuse of public funds. A spokesperson for Val Verde stated that the district has "fully complied" with the audit and is committed to transparency while continuing to serve its student body. However, the former officials mentioned in the report have pushed back against the allegations, with Long asserting that the audit contains numerous false accusations. This audit follows a previous investigation by Business Insider in June 2021, which revealed close ties between district officials and businessman Steven Ma, CEO of a college consulting firm, who helped establish the Chinese boarding school. Ma has denied any wrongdoing, asserting that Pegasus is a legitimate educational program aimed at enhancing cross-cultural learning. As the California Department of Justice and Riverside County District Attorney's office begin their inquiries, the ongoing scrutiny of Val Verde and its association with Pegasus raises questions about ethics and accountability within the education system.